Arkansas Attorney General Tim Griffin fired with both barrels Wednesday, suing Kalshi and VGW in separate filings targeting the prediction markets and sweepstakes operators, respectively.
Griffin accuses both companies of offering illegal gambling in Arkansas and seeks major financial penalties, including restitution of losses to customers and of taxes to the state.
“Companies that operate gambling businesses in Arkansas are subject to our gambling laws, plain and simple,” Griffin said in a news release.
Kalshi did not reply to a request for comment before publication.
Arkansas AG: Kalshi is a ‘pocket-sized bookie’
Griffin used plain language in establishing the framework for his action against Kalshi, calling the prediction markets operator a “pocket-size bookie.”
“This case is not about a market where participants manage legitimate business and financial risks. such as uncertainty related to weather. commodities, and other economic conditions. Rather. it concerns Kalshi’s effort to stretch the derivative-market framework beyond recognition,” the suit reads in part.
“Rather than limiting its offerings to contracts that help market participants manage economic risk, Kalshi invites consumers to risk money on the outcomes of football games. elections. awards shows, and virtually any other real-world event.
“The existence of legitimate derivatives does not grant Kalshi carte blanche to turn virtually any real-world occurrence into a betting opportunity. When it comes to the majority of its offerings, Kalshi is not a risk management tool; it is a pocket-sized bookie.”
Problem gambling deal undercuts Kalshi argument?
Griffin employs an angle not seen in other state-level actions against prediction markets by using Kalshi’s controversial partnership with the National Council on Problem Gambling (NCPG) against the company’s claims of not offering betting.
“Although Kalshi insists that its products are not gambling, its actions speak louder than its labels,” the suit continues. “Kalshi offers self-exclusion tools, deposit limits, trading breaks, and other tools commonly associated with gambling operators to help users stay in control of wagering activity. It promotes gambling addiction resources, including its own partnership with the National Council for Problem Gambling. Kalshi is not blind that its platform presents real, tangible risks to its users including excessive wagering. financial losses. depression, and other mental health harms …”
- “Kalshi would not partner with problem-gambling organizations, direct users to gambling-addiction resources. and impose special protections on young adults if its products carried none of the risks associated with gambling.”
VGW not spared Arkansas AG wrath either
Griffin detailed that the suits against Kalshi and VGW both rely on allegations they violate the Arkansas Deceptive Trade Practices Act by offering a product that makes false claims about what it is.
“VGW provides Arkansans the opportunity to play various popular online games, and it claims that it is not operating a gambling business. But our review of the company shows that claim to be false,” the VGW suit alleges.
The attorney general continued by laying out his case for the dual-currency model employed by VGW and other sweepstakes operators being illegal.
“VGW’s claim that the distinction between the virtual currency one buys and the virtual currency one redeems is weak at best, and courts have rejected this too-cute-by-half logic time and time again,” the Arkansas press release reads.
The action against VGW seeks monetary relief similar to the Kalshi suit in the form of restitution and penalties, as well as preventing the company from future operation in Arkansas.
Arkansas sports betting history at a glance
Arkansas first put sports betting legalization to a test in 2018 via a ballot measure. Voters approved in-person sports wagering at four casino locations.
As in other states restricted to in-person sportsbooks, though, Arkansas generated little revenue compared to jurisdictions with online wagering. From its launch in 2019 through early 2022, Arkansas sports betting revenue crossed $1 million in just four individual months.
The market expanded to online wagering in March 2022 with BetSaracen, and added the DraftKings and FanDuel apps in March 2026. Through May 2026, the Arkansas market generated more than $185m in revenue on $2.3bn in handle.
